Sunday 21 January 2018

Global slump in oil prices wipes out 100,000 jobs

A worker walks in between oil barrels at Pertamina's storage depot in Jakarta. Reuters
A worker walks in between oil barrels at Pertamina's storage depot in Jakarta. Reuters

Bradley Olson

The promise of plentiful jobs and salaries as high as a quarter-million dollars a year lured Colombia native Clara Correa Zappa and her British husband to Perth, Australia, at the height of the continent's oil and gas frenzy.

Engineers were in high demand in 2012, when oil prices exceeded US$100 a barrel, making the move across the world a no- brainer. Within two years, though, oil plunged to less than half the 2012 price and Zappa lost her job as a safety analyst. Now she's worried her husband, who also works in the commodities industry, could also lose his job.

Such anxieties are rising at a time when the number of energy jobs cut globally have climbed well above 100,000 as once-bustling oil hubs in Scotland, Australia and Brazil, empty out, according to Swift Worldwide Resources, a staffing firm with offices across the world.

"It's shocking," Zappa (29) said in a telephone interview. There is "so much pressure for him to keep his job and even work extra."

Her concerns mirror those of tens of thousands of workers who migrated to oil and gas boomtowns worldwide in the years of $100-a-barrel crude, according to Tobias Read, Swift's chief executive officer. While much of the focus on layoffs has centred on the US, where shale fields that created the glut have seen the steepest cutbacks, workers in oil-related businesses across the globe are suffering, he said.

"The issue is one of uncertainty, of whether there's a job out there," Read said.

"For seven years, there was a shortage of staff. Now for the first time, there's a surplus. Currently almost no one is hiring."

One by one, engineer Dipankar Das has heard from friends across the industry as layoffs rolled out across Australia. A friend at one company was asked to take a year of unpaid leave.

Many are moving, which is what Das said in an interview he plans to do.

"You get all these skills, all these projects that have been completed over the years, and then all of a sudden it's over," said Das, a native of India who has worked in Australia for seven years. "It's disappointing, but what can you do?"

The outlook isn't brightening. After briefly rising above $50 this month, US crude fell again Wednesday to settle at $48.84 a barrel. Citigroup said oil could drop to "the $20 range" by April as oversupplies build.

How long it will take for the job carnage to stop is now the main question confronting industry workers.

Executives at companies including BP and Royal Dutch Shell have announced spending cuts of more than $40bn and assured investors they're ready to tighten further if the market doesn't recover significantly.

Australia stands out as especially hard hit by the fall, with the labour force also hit by a slowdown in the coal mining industry.

Irish Independent

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